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Steep declines in natural gas and oil prices this year have hurt many energy producers' earnings. The relatively underreported drop in natural gas liquids (NGL), however, has arguably done more damage industry-wide, in large part because it's so difficult to economically hedge ethane, methane and propane.

Spectra Energy Corp (SE) felt the bite, as second-quarter profit fell by 21.4 percent. The Western Canada Transmission & Processing unit's earnings dipped 16.8 percent, while Field Services income fell in half. NGL prices showed an average drop of 37.9 percent from year-ago levels.

But even amid these dismal conditions Spectra comfortably covered its dividend with a 70.4 percent payout ratio, while staying on track to deliver management's goal of 8 percent annual dividend growth. The key: the company's systematic investment in fee-based energy midstream assets, which it's largely locked up under long-term contract. The company has $8 billion in new assets under construction--including at 50 percent-owned DCP Midstream LLC--that will push profit higher by early 2013.

There's an additional $20 billion of projects in the planning stage, ensuring strong cash flow and distribution growth to the end of the decade and beyond. Those include a project to export Canadian liquefied natural gas (LNG) and a pipeline to bring Marcellus Shale gas to power generators in Georgia.

The faster Spectra builds, the less commodity-price swings will affect its earnings and the more its dividends can grow. Spectra is an undervalued stock at current levels. You can uncover three more robust income stocks by checking out my free report, The Top 3 Income Trusts to Buy Now.

Source: Even Amid Dismal Conditions Spectra Covers Dividend Comfortably